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Innovation management tools: implementing technology watch as a routine for

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Article  in  Technology Analysis and Strategic Management · October 2014

DOI: 10.1080/09537325.2014.944150

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Published in: Technology Analysis & Strategic Management, 26(9), 1073-1089.

Innovation Management Tools: implementing technology watch as a routine for adaptation

Jon Mikel Zabala-Iturriagagoitiaab

a.- Deusto Business School, University of Deusto

b.- CIRCLE, Lund University

Address for correspondence:

Jon Mikel Zabala-Iturriagagoitia

Deusto Business School, University of Deusto

Camino de Mundaiz, 50

20012 San Sebastián (Spain)

Phone: +34 943 32 66 00

e-mail: jmzabala@deusto.es

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Published in: Technology Analysis & Strategic Management, 26(9), 1073-1089.

Abstract:

Innovation management is a multidisciplinary field which has been growing for the past few
decades. However, the management of innovation is often considered equivalent to technology
management or the management of research and development. By focusing on a set of SMEs
operating in a medium-high tech industry, the paper intends to determine the characteristics of
innovation management tools. In particular, we address one of these tools, technology watch, and
define a set of generic stages to introduce the most relevant roles for its implementation.
Technology watch consists of the systematic observation, analysis and use of technological
information, allowing companies to be aware of their external environment and learn from it.
Through the implementation of technology watch processes, companies are able to assess and
adapt their current technological base and the fit of their internal competences to the signals
coming from the external environment.

Keywords: innovation management, tools, implementation, technology watch, SME.

Highlights:

 We define the main purpose of innovation management tools.

 We provide a structured view of technology watch processes.

 The key stages are observation, analysis and use.

 The key roles are observers, analysts, decision-makers and animators.

 We focus on SMEs in a medium-high tech industry.

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1.- Introduction

Innovation management (IM) is a multidisciplinary topic with a multifunctional nature, as it

involves disciplines such as science, engineering, economics, strategic management, sociology
and psychology (García and Calantone 2002). IM has been a growing field of study for the past
four decades, due to, among other factors, increases in the complexity, cost and pace of
technological innovation (Gebauer 2011; Phaal, Farrukh and Probert 2006).

White and Bruton (2007, 23) define IM as “a comprehensive approach to managerial problem-
solving and action based on an integrative problem-solving framework, and an understanding of
the linkages among innovation streams, organizational teams, and organization evolution. It is
about implementation-managing politics, control, and individual resistance to change. The
manager is an architect/engineer, politician/network builder, and artist/scientist”.1 IM has to be
understood as a core process which requires continuous application and will necessarily lead to a
certain level of restructuring and reorganization (Leonard-Barton 1988). The main purpose of IM
is to introduce change in organizations in order to create new opportunities or exploit existing
ones (Mol and Birkinshaw 2009; Nosella 2014). It is a long term race which is distinctive for
being systematic (Gebauer 2011).

In particular, we will focus on the Technology Watch (TW) process and the stages required for
its implementation. One of the reasons for choosing this tool is the increasing number of
demands companies face concerning their scanning routines. This is a result of keen (global)
competition, but is also due to higher demands for flexibility in order to adapt to changing
market requirements, shorter product life cycles, shortages associated with the time-to-market
and shorter time spans between leaders and followers. This competitive and changing scenario
demands that companies become much more permeable to the external environment (Teece,
2007). TW is one of the tools that can be useful for companies to nurture their levels of
permeability.

In spite of the obvious nature of search activities, few companies have implemented routines for
their watch processes (Bucheli and Gonzalez 2007). Notwithstanding the interest and reasons for

1
Other scholars define IM as the invention and implementation of a management practice, process, structure, or
technique that intends to enhance firm performance (Birkinshaw, Hamel and Mol 2008, 825; Mol and Birkinshaw,
2009, 1269).

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intervention in search routines, not many examples of a systematic design derived from the
implementation of TW can be found (Nosella, Petroni and Salandra 2008), particularly in SME
contexts. This research gap is analogous to the lack of existing cases on the application of
particular IM tools in SMEs (Dou and Dou 1999; Libutti 2000; Mol and Birkinshaw 2009).

According to Nelson and Winter (1982), decision-making processes leading to innovation are
regarded as organizational routines, which, in case of success (i.e. successful introduction of
innovations in the marketplace), may lead to repetition. This ‘routinization’ or persistence of
routines may impact firms’ innovative behavior and performance in the long run, leading to
potential lock-in situations. These endogenous blocks or lock-in situations are derived from the
fact that business environments, as well as firms, evolve in a continuous manner (Suárez 2014)
and sometimes may even evolve radically (Eisenhardt and Martin 2000; Gómez-Uranga, Miguel
and Zabala-Iturriagagoitia 2014) in highly dynamic, turbulent or unstable environments.
Therefore, a certain routine is needed for firms to avoid this potential risk of failure. From our
point of view, providing a systematic way to undertake TW processes may be a first step in this
direction.

The reason we focus on TW as a key routine for firms’ adaptation to changing environments is
the increasing attention that firms are paying to ‘screening’ processes (Prajogo and Ahmed
2006). Firms are increasingly challenged by global competitive pressures in a context that often
becomes unstable (Cantarello, Martini and Nosella 2012, 28). In these changing environmental
conditions, search routines have become more important than ever before, as firms are
continuously being tested by new technological developments, creation of new firms,
applications, user needs, demand behavior, mergers, patent acquisitions, etc. which challenge
their survival. Seeking external information is therefore becoming a key routine in market
adaptation. Screening, or scanning, is not only understood as benchmarking what competing
firms are doing, but also as a search for technological developments (i.e. patents), new standards
(i.e. standard essential patents), new spin-off and start-up firms (i.e. entrepreneurship), changes
in regulations, changes in demand, etc. We believe providing a systematic way to develop what
we label as TW processes in the context of this paper can enhance the ability of large, medium
and small firms to adapt to changing conditions in their respective environments.

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The paper puts forth our view on the implementation of TW processes for small and medium
sized enterprises (SMEs) operating in traditional industries, although the process could also be
adapted to firms operating in other sectors. In order to achieve the previous goal, we have
conducted an explorative case study on a group of machine tool manufacturing firms in the
Basque Country (Spain). By focusing on these SMEs we aim to develop an analytical framework
based on their search routines that could be applied in different (sectoral and geographical)
contexts. We chose SMEs in traditional industry segments due to the fact that contributions
dealing with technological exploration and exploitation routines have mostly studied large
corporations, typically in the high-tech sector (Burgelman, Christensen and Wheelwright 2004;
Lichtenthaler 2004b; Nosella 2014). However, the experiences and insights gained through their
use in large high-tech corporations are not applicable? to smaller organizations operating in other
non-high-tech industry segments. This is not only due to the considerable differences in the
availability of resources but also to the structural differences between them.

A survey conducted by IDETRA (2002) revealed that despite managers of SMEs being aware of
the relevance of new technological developments, most of them had not implemented a
systematic process to search, analyze and (internally) disseminate information that may have
been effective in securing the company’s sustainability and competitiveness. The study showed
that in small companies where efforts in implementing these processes had been made, top
managers play the key role, with no room for employee participation (p. 41). On the one hand,
this illustrates the strong hierarchies and centralization still existing in most SMEs, and on the
other, the fact that information circulates from top-down. One of the reasons for this limited
scope of information is the lack of human and technical resources dedicated to these tasks and
the absence of a specific methodology. This paper aims to address this gap by defining a
systematic way to develop TW processes in SMEs.

The remaining part of the paper is structured as follows: Section 2 provides an overview of the
methodology followed, and introduces the territory and the companies where the fieldwork was
conducted. Section 3 focuses on the TW process derived from the previous action research
approach, addressing its main characteristics, rationales, actors, phases, strengths and limitations.
Section 4 concludes the paper by broadening the scope for further research areas related to IM.

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2.- Methodology and research design

This paper is based on in-the-field experiences in twelve machine-tool companies and

technology centers in the Basque Country (Spain). The machine tool sector is regarded as a
medium-tech industry, despite its high investments in R&D activities. The Basque Country is the
leading region for this type of industry in Spain, which is illustrated by the high investments in
R&D. These amounted to € 34 Million in 2011 (Eustat 2014), which represents 3.3% of total
investments in R&D in the Basque Country.2

The machine tool sector was selected due to its proliferation and economic relevance in the
Basque Country. Of the different districts within the Basque region, we focused on the
‘Debabarrena’, as it is where the highest share of machine tool firms in the region are located
(Eustat 2014).3 The average size of the industrial establishments in the district in 2003 was 13.9
employees (13.28 in 2011). These SMEs employ 35% of the active population in the districts, a
share that has not varied in the last 10 years. The active population with higher education
qualifications was only 9.26% in 2001, despite these figures changing considerably in recent
years (17.34% in 2010). In turn, the profile of the active population is mostly oriented to
vocational/professional training, which comprises 17% of the total – this figure has remained
constant over the last 15 years (Eustat 2014). In this sense, the presence of the ‘Institute of the
Machine Tool’ is worth noting. It offers sectoral training fostering lifelong learning and carries
out periodic diagnoses of the sector’s key competences.4

Of all the machine tool firms located in the Debabarrena district we focused on the firms that
belong to the Danobat Group. This group is the largest Spanish corporation of machine tool
manufacturers.5 Its production accounts for 20% of the entire domestic machine tool industry by
chip removal. It comprises 12 companies (i.e. Danobat, Overbeck, Newall, Danobat Railways
Systems, Dano-Rail, Goimek, Estarta, Goiti, Eurofiber, Soraluce, Latz and Ideko) which have 15

2
Similar figures are obtained when calculating the share of researchers, technicians and support staff employed in
the industry as compared to those employed in the Basque innovation system as a whole.
3
Deba, Eibar, Elgoibar, Ermua, Mallabia, Mendaro, Mutriku and Soraluze are the towns located in this district.
During the period of industrial development, these towns witnessed the production of sewing machines and bicycles
which later led to the development of the industry supplying the automotive sector, such as machine tools. Relevant
companies operating in the machine tool segment are located in this area (e.g. Danobat, Ideko, Microdeco, Etxe-tar,
Lanbi, Goratu, Kondia, Estarta). These and other companies are form part of the Spanish Association of “Machine
tool, accessories, component parts, and tool manufacturers” (see http:// http://www.afm.es last accessed May 2014).
4
http://www.imh.es/en (last accessed May 2014).
5
http://www.danobatgroup.com/en/about/organization (last accessed May 2014).

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production plants.6 The main products and technologies of the Danobat Group include grinding,
milling, boring, turning, cutting and drilling, sheet metal processing, rail equipment, tools, and
fibres and composites. With these technologies and products the group targets sectors such as
automotive, aerospace, railroad, oil and gas, and energy. In 2012 Danobat, as an industrial group,
had 1,222 employees and an annual turnover (i.e. sales) of €230 million (70% in exports). 7% of
this turnover is dedicated to R&D activities.7

In order to develop a TW process that could meet the needs and expectations of the firms under
study, we focused on product and process innovations, mainly due to the type of sector, where
technological improvements and new developments are key to its evolution. Nevertheless, we
also acknowledge that organizational innovations may be significant for the performance of
small firms engaged in technological innovation (Gallego, Rubalcaba and Hipp 2012).

The methodological approach relied on participant observation of the firms and the use of semi-
structured interviews with CEOs and managers of the companies that belong to the Danobat
Group. This participant observation is related to the methodological approach of action research
(Greenwood and Levin 2007), which is based on dialogue that combines the knowledge of
internal and external participants to develop suitable solutions to the challenges that firms face.
These processes took place in the Debabarrena district between February 2001 and March 2002.

In a first phase (February– May 2001) the scientific literature was accessed in order to develop
an overall understanding of the purpose and benefits of TW, the stages in which TW was divided
and the roles required for its implementation. In a second phase (May-December 2001), a TW
process that could be adopted by and adapted to the targeted manufacturing companies was
developed in cooperation with key members of these organizations. This implied holding a series
of interviews, analysis of internal archival information, on-the-spot trial-and-error processes,
workshops,8 internal presentations and the progressive application of the process for its fine-
tuning. The action research approach led to more than 40 open-ended interviews with key

6
The firms we have included in our analysis may be regarded as “strategic and creative” according to the
classification provided by Rush et al (2014), depending on the level of readiness to accomplish innovation-oriented
projects.
7
The group has a research branch called Ideko, a technology centre where more than 100 highly qualified
specialists, technicians and researchers are employed.
8
During the course of one year, six workshops were held to share the views of all the researchers that participated in
the definition of the TW process and help to perfect it.

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researchers, engineers and managers from the different firms, and whose views were included to
make the TW process fit the demands of these firms.9 These interviews were followed by further
contacts during this period in order to develop a TW that could be adapted to the skills and
demands of the companies.

The explorative and analytical nature of this paper allows for a case study approach (Eisenhardt
1989; Yin 2003). This qualitative case study approach is considered a suitable research
methodology, as it not only enables a situation to be described, but also allows new or existing
concepts to be developed and tested. In this case, our goal is not to define a new theory, but to
integrate streams?? currents of literature relevant to a problem area and use the conclusions and
recommendations obtained through case studies to fill existing gaps. With this qualitative
approach we aim to enhance the understanding of the search routines and develop an analytical
framework that could contribute both to theory and practice. As a result, the TW process
proposed is testable and valid for case studies where it might be applied in other industrial and
geographical contexts.

3.- Implementing Technology Watch10

Innovation has long been categorized as an interactive process. Its interactive nature not only
applies to private firms but also to public organizations. Due to the increasing technological
complexity of goods and services, organizations need to rely on competences developed
elsewhere. Technology plays a central role in IM, not only as a driver of new products/processes,
but also as a key determinant of changes in the industrial structure (Prajogo and Ahmed 2006).
This makes companies aware of the technological advances and research-based applications
developed by their competitors and potential partners (Porter and Cunningham 2005). Firms
need to constantly track emergent technologies and applications, while maintaining competences
in their core technology areas. One of the multiple tools to carry out this scan is TW. The TW

9
Several of the previously listed companies had, prior to this study, already prioritized those technological areas that
were strategic to their sustainability and matched them with their corresponding responsible observers. Hence, the
selection of the interviewees was facilitated by the existence of these roles within the targeted organizations. We
therefore focused on those individuals who had previous experience in Technology Watch activities, as their
opinions could most contribute to adapting the TW process to the particularities of the firms and the sector in which
they operate.
10
This section is partially based on Zabala-Iturriagagoitia (2012).

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process may aid organizations in their learning processes as it allows them to identify, search and
capture (external) information of relevance to the firm, analyzing and assessing that information
in order to develop new knowledge, and finally produce new innovations that might be
disseminated (Bessant, Caffyn and Gilbert 1996). TW can act as a ‘gatekeeper’ within the
broader IM, as it opens the scope for scanning, focusing and learning routines.

The general purpose of TW processes is to check for, gather and retrieve information on
technological advances developed by other organizations, so that the company can make
appropriate decisions on investment, cooperation and competition strategies. It consists of
systematically capturing, analyzing, disseminating and exploiting useful technical information
for the sustainability and growth of the organization (Escorsa-Castells and Maspons 2001;
Petrick and Echols 2004). In the words of Libutti (2000, 414) it allows to “listen to and watch
what is happening in the environment in order to learn about all the useful innovations that can
support the technological developments indispensable to the company for facing competitors”.

As we will see, TW can have a direct influence on a firm’s innovative orientation. However, it is
also very much dependent on absorptive capacity (Cohen and Levinthal 1990). If absorptive
capacity is understood as the “ability to select and obtain valid information from outside the
company, to assimilate such information and apply it to company products and processes”
(López-Mielgo, Montes-Pesón and Vázquez-Ordás 2009, 539), it can be concluded that there is a
mutual dependence between the two concepts.

TW filters, interprets and evaluates the information gathered so as to facilitate decision-making,

and allow the firm to behave more efficiently by focusing on its core competences, technologies
and dynamic capabilities. It is the need to make decisions in an uncertain environment which
links TW with corporate strategy (Hidalgo Nuchera, León Serrano and Pavón Morote 2002).11
Still, the watch can also be used for purposes other than a mere technological search, and we
may also refer to competitive, commercial, legal or environmental watch processes. Although

11
This is a field which is arousing increasing interest, not only among IM scholars and practitioners, but also among
regulators. The UNE 166006-2006 standard was introduced by the Spanish National Accreditation Body (AENOR)
in 2006 as an effort to make the management of R&D and innovation more systematic, and in particular to provide a
clearer structure for those companies interested in the introduction of TW processes.
http://www.aenor.es/aenor/normas/normas/fichanorma.asp?codigo=N0036140&tipo=N (last accessed May
2014).

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this paper will only focus on TW, the process outlined below may easily be applied in other
types of ‘watching’.

With this section we want to contribute to the literature with the development of a core set of
generic stages into which the TW can be divided according to the needs of the local companies
and the availability of their resources (i.e. technological and human). In addition, we aim to
highlight the key roles and competences required to make the TW process work in SME
contexts. The section will conclude with a description of the strengths and limitations of this
tool.

3.1.- Activities

This section analyses the stages that facilitate the implementation and development of TW
processes. As we will see, the organization of TW is dependent on internal communication
processes structured around certain nodes (networks of observers and analysts). The TW process
is basically a matter of managing different types of formal and informal, internal and external
information sources (Dou 1997). On the one hand, formal sources may include, books, trade
journals , databases (e.g. patents, standards, statistics), presentations at fairs, meetings,
workshops or conferences. The information provided by venture capital funds could also be
regarded as a source of technological trends and solutions at a very early stage. On the other
hand, informal sources refer to those items of information collected through hearsay,
networking, or personal contacts (local, national, international), which require verification to
avoid providing misleading information to internal decision-makers. This comprises daily
information from suppliers and customers, experts, labor unions or consulting companies.

One of the main purposes of TW is to convert the gathered information into action (Dou and Dou
1999; Lee and Om 1994). Information retrieval is not useful unless it is organized, analyzed,
evaluated, understood and provides the basis for decision-making (Kärkkäinen, Piippo and
Tuominen 2001). This requires the development of a TW process which includes all these stages.
However, existing research is quite contradictory on how this process should be organized.
Lichtenthaler (2004a) divides the TW process into acquisition, assessment and coordination,
while Porter and Cunningham (2005) distinguish among intelligence, analysis and design, and
choice. We consider that these general stages are too broad, making the process too ambiguous
for implementation in our context. In this sense, we are closer to Cetindamar, Phaal and Probert

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(2009) who distinguish between identification, selection, acquisition, exploitation, protection and
learning, or to Kerr et al. (2006) for whom the TW cycle consists of six phases: coordinate,
search, filter, analyze, document and disseminate. From our point of view, however, the
approach proposed by these authors includes some stages which do not belong to the TW
process, but rather to the general routines of IM practice such as exploitation, protection or
learning. Our proposal intends to cover this gap by offering a general description of the TW
process (Figure 1) which could be adopted by the machine tool firms we focus on. We believe
this TW process could also be applied in other manufacturing and service companies. However,
it should be noted that it would necessarily have to be adapted to the particularities of each
company and their local context (Ortt and van der Duin 2008).

[Figure 1 here]

As the reader may note, the TW process has been divided into three general stages: observation,
analysis and use. This will have a clear influence on the roles required to be included in the TW
process (observers, analysts and decision-makers12), which will be discussed in the next sub-
section. The first stage (observation) is also divided into three activities: select, search and
synthesize.

One of the most crucial decisions the company will face is what to search for. Due to the limited
amount of resources, companies need to set their priorities as to the key technologies they are
interested in. The TW needs to be focused, so clear targets aligned with the corporate strategy of
the company need to be set in order to seek a balance between the key and peripheral
technologies. In our case, identification of the technological areas the companies would focus on
was carried out through reaching consensus among key researchers and engineers, the members
of the technology board of the Danobat Group and the general managers. As a result, the
prioritized technological areas were: (i) machining processes: traditional, alternative, high
performance, precision, ecological; (ii) new product development: design and simulation, testing

12
Porter and Cunningham (2005) talk about watchers, technology and business analysts, and finally planners and
managers.

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and validation of components and systems, reliable product design; (iii) improvement of
machines and components: computer numerical control (CNC), performance improvement,
drives, new materials, new architectures, guidance systems (linear and rotary), tools; (iv) service
integration: interfaces, teleservice, machine and process monitoring systems.13 By ‘watching’
these technological areas, the companies aimed to minimize their vulnerability to global
technology-based competition.

As mentioned above, the information can be formal or informal, and obviously every member in
the organization can potentially receive relevant information. However, searching for
information does not imply its direct acquisition. Data need to be filtered first, so that non-
relevant or already known information is avoided. Capturing information (usually) involves the
creation of scanning teams or networks of observers, each focused on a particular technology.
The observer network will have to make certain decisions (with their corresponding risks) about
which information to focus on and which to dismiss. In the case of SMEs, it is very often the
case that, due to the lack of skilled personnel or limitations in the availability of resources (i.e.
limited amount of employees), this search cannot be afforded internally (Porter 2005). 14 Thus,
not all companies need to carry out all the activities included in the model proposed in Figure 1.
This will depend on the skill availability, the amount of resources that could be directed to the
TW and the life cycle of the listed technologies. Accordingly, although the responsibility for the
first stage of the TW process lies with the observer network (either internal or external to the
company in the case that this stage is subcontracted), it is recommended that as many individuals
as possible should be active during the search stage (Dou 1997).

This information needs to be disseminated and shared within the organization, so everyone can
have access to it.15 Observers are usually required to have a broad knowledge of technologies
and disciplines of interest to the company. Should they be too specific, the company would run
the risk of missing technological opportunities in related fields. It is a matter of the observers
‘feeling’ the future opportunities of a technology and how the company may be affected by them

13
Due to the large number of technologies identified within each of the technology areas, these have not been
included.
14
There are companies (public and private) offering these services to local SMEs at an affordable price. For some
examples, see the concluding section.
15
In the last decade several knowledge management tools and platforms have been developed in order to make the
search stages more continuous and systematic (Bucheli and Gonzalez 2007).

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(van der Duin and den Hartigh 2009). The rationale is that the more information disseminated
internally, the better the chances of not missing a technological or market opportunity. However,
it would not be practical for the observers to directly release all the information retrieved. This
would make the process very tedious and lengthy, when the TW needs to be flexible, leading to
effective adaptation. Dissemination can be done either personally (meetings among the
observers) or through a more formal process such as internal computerized dissemination/sharing
of the documents via internal repositories, databases or information management platforms. A
practical way to carry out this task is by using ‘synthesis sheets’. Their purpose and content are
described below.

The second stage deals with the analysis of the information collected by the observer network.
The goal of this second stage (analysis) is twofold. On the one hand, the process should
transform the data collected in the steps above into useful knowledge for the company. On the
other hand, an assessment of the technologies observed during the search stage should be made
in order to judge the potential impact they may have on the future performance of the firm. This
stage is also divided into two subcategories: treatment and distribution. Due to the (usually) vast
amount of information gathered by the observer network, it is not practical for the
analysts/experts in charge of this second stage to start with a thorough analysis of each
information source. That would make the process unrealistic and lengthy (Porter 2005). The
results provided by IDETRA (2002) evidence that most firms spend considerably more time on
the search phase than on the analysis, usually due to the lack of a systematic approach when
undertaking these tasks In this sense, Cook and Cook (2000) emphasize that for an effective use
of these processes, about 35% of the time invested in them should be devoted to the analysis
stage.

In order to avoid the previously mentioned time constraints, we recommend the use of ‘synthesis
sheets’ (Figure 2).16 The synthesis sheet is the main output of the first search stage and it is the
responsibility of each observer to define it. The synthesis sheet usually details the person
responsible for it (so the organization can identify the individuals in charge), the technological
area the observer belongs to, a short summary of the technology found, a description of its major
technical issues, and a list of recommendations concerning its future applicability. As indicated
16
Dou (1997, 80) talks about “general information files”, which should answer the following question: who is doing
what, where and when?

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earlier, we believe that the more the observers circulate the information found, the better the
chances for the company to detect future opportunities. Finally the sheet should also include the
sources where the information was collected.

[Figure 2 here]

The treatment of the information does not imply the usage of all files documented, but the
analysis of the synthesis sheets written by those observers in charge of the selected technology
areas. Since the sources of relevant information have already been included in the synthesis
sheet, an analyst who wants to know more about the particularities of a specific technology can
always go back to the original sources or communicate directly with the person in charge of the
synthesis sheet. Particularly, the identification of the key individuals in charge of writing the
synthesis sheet becomes crucial. When the TW cycle (a round of the whole TW process) has
been completed once, everyone in the company remembers who wrote what, but when the cycle
is repeated several times, over the years, identifying the person in charge of a particular synthesis
sheet does not become self-evident (the same applies for the expert sheets, to be introduced
next).

To close the analysis stage, the treatment step implies the definition of the proposal that will be
distributed to the TW managers (or those in charge of general management in the case of SMEs)
concerning the actions to be undertaken for that particular technology. In our experience, this is
facilitated by the use of what we call ‘expert sheets’ in this paper (Figure 3).17 Expert sheets
include all the information managers would need to know about the organization that has
developed the technology being scanned, together with the actions that the analyst network has
identified as potentially beneficial.

[Figure 3 here]

17
Porter (2005, 1070) refers to “open pagers”, which should “point to action recommendations or posing of key
choices” (ibid, 1074).

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Finally, the process is concluded with the use and exploitation of the expert sheets, which set the
basis for the decisions to be made by the managers. Usually, these decisions imply that managers
have to position themselves regarding such issues as corporate strategy, internal development or
external acquisition of R&D/technologies, intellectual property, cooperation agreements with
key companies, the need to strengthen core competences in particular technological fields or the
development of new project ideas. However, it is not only the factors internal to the company
which shape the decisions in one direction or another. Decision-makers also need to be aware of
other contextual or environmental conditions, such as new regulations, economic cycles, etc.
(Ortt and van der Duin 2008). All these decisions need to be included in a ‘TW report’ which
contains all synthesis and expert reports, together with all relevant information gathered during
the process. This TW report, however, is not only intended to summarize the contents of the TW
process. Issues such as new orientation of the corporate/innovation strategy, new project ideas,
cooperation needs with external organizations, training programs, competence development,
learning, etc. which can be derived from the TW, could also be discussed in it.

One of the key questions concerning the TW process relates to its periodicity. How often should
the TW cycle be run? We do not have a clear answer for it, as it depends on the speed of
technological change, which is industry-specific. Our experience in the application of the TW
process tells us that information retrieval is not constant, not even within the same firm.
Sometimes several technological findings accumulate around key dates (e.g. fairs, exhibitions or
meetings) while in other periods none are found. It is a matter of being systematic. In the
targeted companies the periodicity was three months, so all relevant stakeholders had four TW
reports per year. However, this did not prevent the TW process from being developed in a more
flexible way when a potential technology that required a fast decision was identified, so as not to
miss opportunities due to poor timing (e.g. after participation in a fair). In any case, this is a
matter that needs to be addressed by each company individually, depending on the pace of the
technical change cycles in their respective sector of activity, and not least, to be accepted by the
managers of the company.

The TW process can be carried out in a centralized or a decentralized manner (Nosella, Petroni
and Salandra 2008), implying that companies are not required to develop all the stages of the TW

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process internally, something that might be relevant for SMEs. Lichtenthaler (2004a) shows that
when the TW is decentralized - some of the stages outsourced to external organizations, its
outputs are hardly used. We cannot assess whether a centralized approach is more suited to the
particularities of SMEs or not. However, we consider SMEs may be more prone to
decentralize/outsource some of the stages of their TW processes. Be that as it may, we still
believe that participatory decision-making procedures are the only guarantee for the company to
pursue its strategic goals in a consensus-based manner. Accordingly, we believe the right way to
proceed is to include the views of all observers, analysts and managers in the final decisions.
This will enable managers to engage in direct conversations with those directly?? Immediately??
in charge of the search and analysis of the technologies. If the search stage were outsourced, then
we would recommend that these external observers participate in the analysis or final
use/exploitation of the findings, so the decision-making process would be as consensual as
possible. Our experiences have also proved that bringing the observers and analysts into the
decision-making was particularly useful. This is the reason why, besides circulating a periodic
TW report to relevant stakeholders, observers and analysts (either internal or external) were also
directly involved in decision-making stages where the viability and the degree to which the
company should invest/acquire/develop a certain technology were discussed.

3.2.- Roles

Figure 1 shows the general TW process where three major roles are identified: the observer
network, the analyst network and decision-makers. This is aligned with the findings of Tomala
and Sénéchal (2004, 282) who also distinguish “product sponsors”, “expert advisors” and
“decision-makers” when discussing the roles that the internal staff within a company adopt in an
innovation process.

The main tasks carried out by the observer network consist of searching, collecting and
disseminating information. As pointed out above, the observer network should (potentially)
include all company employees and stakeholders. The more ‘agents’ involved in this constant
search, the lower the risk of missing an an item of information that could imply a breakthrough
the company should be aware of. In addition, this broad-based involvement also avoids the
problems associated with situations arising when an individual with key knowledge on the
technologies used and the future technological prospects leaves the organization (Hidalgo

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Nuchera, León Serrano and Pavón Morote 2002). The philosophy behind this is that everyone in
the firm should act as an observer (Porter and Cunningham 2005). However, as mentioned in the
previous section, and particularly in an SME context, this role may be more likely to be
outsourced to external organizations.

The analyst network is oriented towards the treatment, analysis and validation of the information
gathered by the observer network, and which has been translated into the synthesis sheet. That is
to say, they translate information to potential impacts which will be presented to the managers in
expert sheets. This implies assessing the value of the technologies identified according to their
potential impact ?? on?? the firm. We need to stress here the relevance of the individuals
engaged in this role, as the availability of a broad knowledge base can act as a key source of new
ideas that might eventually turn into new innovations (Hidalgo Nuchera, León Serrano and
Pavón Morote 2002). Since the analysts’ role is firm-specific, outsourcing their function could be
more problematic. SMEs may decide to subcontract this function to the associations or unions
they are clustered in. However, we believe that commissioning this function may also imply less
influence exerted on the strategic view of the company??? , as the analysts’ main role is to
translate the opportunities observed into operative targets.

Finally, decision-makers have the least structured role, implying a large amount of verbal
communication with the other actors in the process. We have already advocated a broad, open
and consensus-building approach to decision-making procedures, regardless of the TW stages
that might be outsourced.

Last but not least, our experiences also point to the need for another crucial role: the ‘animator’.
Its main role is to create a collective orientation towards information sharing, gaining the
commitment and implication of observers and analysts. Small companies in traditional sectors
show great resistance to change, and the introduction of any type of IM tools usually leads to
opposition from the staff. Accordingly, we consider that, in order to ensure the TW process from
the very beginning, setting an animator with certain responsibility within the company is a must
(Cantarello, Martini and Nosella 2012). (S)he will require good public and human relations as
well as communication skills, besides commanding a certain respect within the organization. The
relevance of this role has also been highlighted by other scholars. Kärkkäinen, Piippo and
Tuominen (2001, 175) talk about “experienced leaders”, Nosella, Petroni and Salandra (2008,

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Published in: Technology Analysis & Strategic Management, 26(9), 1073-1089.

325) call them “gatekeepers”, Phaal, Paterson and Probert (1998) “facilitators”, and
Lichtenthaler (2004a, 333) names them “promoters”.

3.3.- Strengths and limitations

One of the characteristics of TW is its adequacy and adaptability to different organizational

contexts. For example, some organizations may be interested in using TW as an input in their
planning and corporate strategy, whereas others may be more inclined to use the same activity
for other purposes (e.g. benchmarking particular competitors or potential research centers to
collaborate with) without it being so fully integrated in the general strategy. In fact, we could talk
about many different degrees of TW implementation, ranging from unsystematic, reactive and
basic levels to systematic, proactive and advanced (Nosella, Petroni and Salandra 2008). Another
great benefit companies can obtain from TW processes is the promotion of internal learning.
Since the process allows all observers, analysts and decision-makers to detect a broad range of
technological fields to explore (possibilities and threats), it can lay the groundwork for the
generation of new ideas/concepts/technologies or for the development of technological solutions
to perceived problems. This can in fact allow for (lead time) technological advantage over
competitors. However, in order to develop an effective TW, companies need to assess the key
technologies they are interested in and limit the scope of the TW to them. If not, too much
information could lead to stagnation.

Concerning the degree of innovativeness, TW can lead to both radical and incremental
innovations. During the application of the tool in the targeted companies, both types of
innovations were found (e.g. incremental – incorporating sensors in machines to allow for
teleservice, the implementation of multiple simultaneous turning heads; radical –embedded
systems for axes with magnetic levitation).

On the negative side, we need to emphasize that in order to successfully develop and implement
TW processes, the commitment of top management, the alignment of corporate and innovation
strategies, absorptive capacity, flexibility, patience and devotion are also required. This is the
case for all IM tools. In our case, companies argued that the implementation of TW processes
takes long periods of time. In this regard, Porter (2005) shows how the length of TW processes is
often mentioned as one of the reasons why not many firms are interested in their implementation.

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One of the risks of TW is the probability that companies will miss technological opportunities
due to their being so radically different at the moment they are identified. Lichtenthaler (2004a)
shows that many technologies, even if considered acceptable by top-managers, were often not
pushed through due to the degree of radical change involved. Some other weaknesses are the
potentially unlimited amounts of information that can be collected during the observation stage,
which can make the process very time consuming, particularly for the observer and analyst
networks.

Other hazards also include the difficulty of creating incentives for participation with the
consequent danger of TW becoming a routine mechanism. The application (or not) of incentives
is a company-specific issue. In many of the companies we worked with, the observers and
analysts stated that the best incentive was to have ‘time’ to spend on the in-depth study of the
key technologies observed, and the consequent development of new projects and prototypes.
This is the reason why the role of the animator was introduced. He/she should be the one
involving and motivating the staff, particularly during the first cycles of the TW.

4.- Conclusions

Some scholars argue that the literature on IM has not assisted? Benefited? The business
community, mostly due to tunnel vision in which every discipline puts emphasis on its own
contribution instead of searching for cross-disciplinarity (Currie 1999). IM literature has mostly
focused on theoretical discussion rather than on practice (implementation). We have aimed to
offer a user-oriented perspective in which the implementation rather than the theoretical
foundations of TW (as one of the tools of IM) are at the core of the analysis.

This paper intends to make an exploratory contribution to the exploitation of TW in a traditional

industry, the manufacture of machine tools. We define a set of generic stages the TW can be
divided into and introduce the most relevant roles required for its implementation. By making
these stages explicit, managers can see how the TW not only contributes to their search
(exploration) routines – which are more closely related to the role of R&D units, but also to the
exploitation processes that usually translate the R&D findings into marketable products or
processes. The TW process outlined and the roles identified require adaptation to the

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particularities of firms in other industry segments, as these will be constrained by different

institutional structures and demand different skills.

However, these stages are not necessarily the ‘best’ and only way of implementing the tool. They
should not be understood as a prescriptive design, as there are too many factors (internal,
external and institutional) which firms cannot control. Hence, a tool that works in a company
may probably fail in another. It is therefore hard to talk about best-practices when it comes to IM
(Tidd, Bessant and Pavitt 2001). From our point of view, these are just practices, or case studies,
that prove how IM tools are an important asset to the innovative performance of companies. A
practice companies can learn from.

One of the main reasons why SMEs hardly implement TW processes is the time, cost and the
competences required for it. Can these issues be solved or at least partially mitigated? As
illustrated, one of the key stages of the TW process is the information search and the analysis of
the business ecosystem (Teece 2007). In fact, not all companies have access to formal
information sources such as patent databases or scientific journals, nor do they have the required
skills to understand the language used in them (particularly SMEs). Nonetheless, there are many
public and private consultancy firms that offer this type of service. Some examples include the
services offered by most of the support centers for innovation, research and technology transfer
(OTRIs in Spanish) implemented in Spanish public universities.18 Concerning the need for
multiple actors and roles (observers, analysts, animators and decision-makers) we acknowledge
that in the context of SMEs it is usually the same individuals who are involved in multiple
activities, from management to production, from purchasing to sales (Lee and Om 1994) and
hence play multiple roles. By no means do the roles we have introduced imply that each role
must be undertaken by a single individual. By talking about roles instead of using the term
individuals or actors, we intend to reflect the particularities found in the SME context which the
research was based on.

Experience shows how the use of these tools is mostly dependent on the presence of certain
individuals (experts) in the company (Nosella, Petroni and Salandra 2008; Tomala and Sénéchal
2004). The moment these key individuals leave, the tool is often buried. This is further

18
More examples of public organizations supporting the development of TW activities in Spain can be found in:
http://www.fecyt.es/especiales/vigilancia_tecnologica/organismos.htm (last accessed May 2014).

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accentuated in the context of SMEs which are much more dependent on their human resources
than larger firms. Therefore, tools need to be continuously and systematically used, so that they
become institutionalized. Firm managers should not expect that application of TW will turn a
non-innovative company into an innovative one. It is constant and systematic application which
will lead to change and innovative development.

Firms have constraints and are change-adverse, so employees, and particularly managers, need
time to adapt to them. The implementation of IM tools implies change in the organizational
routines and adaptation of certain rationales, such as communication, interaction, learning and
change, and managers need to be aware of these structural changes prior to the implementation
of the tools (Prajogo and Ahmed 2006). IM tools provide the guidelines, stages or the process
that could be followed to make them applicable. They should not be understood as being
prescriptive and normative. We thus advocate the adaptation of IM tools to the particularities of
each firm and to the local environment in which the company is rooted (Bessant et al 2005).

One of the weaknesses of this paper is related to the impossibility of TW processes being able to
detect future shocks that may challenge the survival of the firm. Therefore, the TW process and
the roles we have discussed would only be effective in those situations where the environment is
rather stable. It is hard or almost impossible to predict when, where and how radical changes in
the environment will take place (e.g. natural disasters, massive patent acquisitions, mergers
between firms, etc.).

If the goal of a firm is to survive, it must adapt to the environment. In this sense, screening the
environment can provide new signals that may facilitate its adaptation. However, it should also
be stressed that this type of screening processes should be used in combination with other types
of IM tools such as creativity (i.e. idea generation), foresight (i.e. trend identification in the
medium-long run for scenario analysis) or knowledge management (i.e. information and
knowledge dissemination within the firm) in order to work effectively. How these different sets
of IM tools can complement each other in intertwining processes remains to be studied in further
research.

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Acknowledgements

We are grateful to the editor and two referees who have contributed to increasing the clarity of
the paper. The author is indebted to all the firms, supporting organizations and technology
centers who actively participated in the development and implementation of the technology
watch process. Special mention is given to Patricia O’Connor for her assistance with the
language-editing of the text and to Mikel Gómez-Uranga for the comments provided in an earlier
draft. The author also acknowledges financial support from the Basque Government Department
of Education, Language policy and Culture.

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